Indian Inc. apprehensive about regulatory requirements arising out of Climate Change issues: KPMG report

An overwhelming 83% of the respondents of the recent KPMG report claimed to have a fair understanding of climate change issues. However just under half of these respondents said they have a clear strategy in place to tackle these issues. The recent KPMG report on Climate Change looks to assess the preparedness of India Inc towards this global phenomenon. The study attempts to understand the Indian business leader’s appreciation of the climate change context, its implications for the economy and their businesses, and their readiness to respond to the impending change.

Speaking on the report release Mr Arvind Mahajan, National Industry Director, Energy, Infrastructure and Government of KPMG said “Developing countries like India and China are under increasing international pressure to undertake measures to limit their aggregate emission levels. While the government on its part has recently announced the National Action Plan on Climate Change, the onus is now on private businesses to do their bit”. He added “merely good intentions with regard to environment awareness are not enough, what is needed is a structured and measurable plan. The first step to the process is measuring the current carbon footprint.

Secondly, companies should seek to benefit from opportunities brought by climate change. For instance, the global market for low carbon energy efficient technologies is estimated to be $3 trillion by 2050.

The global awareness on climate change is far greater. Most companies in the developed world have measured and announced their baseline carbon footprint, and also their reduction targets over 5 to 10 year periods. As per the KPMG report the case with Indian businesses is rather dismal. 41% of the respondents in this study indicate having at least some quantified goals for carbon reduction to be achieved by 2010. However, a significant 38% of the respondents have no goals whatsoever. The report also brings to light the lack of appreciation of the tools and capabilities required to contain climate change. The most widespread measure that businesses engage in, or plan to engage in, to tackle climate change is the usage of energy efficient appliances (94%), this is followed educating and training employees on environment friendly practices (77%). A lot fewer businesses are engaged in other primary drivers of emission reductions. Only 29% of firms review and update their global supply chain to achieve energy efficiency and only 25% have discontinued high energy services.

The KPMG study was conducted with a view to finding out how Indian firms are responding to the issues and challenges around climate change. A total of around 70 business leaders at the CEO/CXO level were interviewed for this study. KPMG itself is committed to addressing climate change first and foremost, by acting as a good corporate citizen. The principal ambition of ‘KPMG’s Global Green Initiative’ will be to reduce the member firms combined carbon footprint by 25% by the year 2010 from a 2007 baseline, through emission reduction schemes and the use of renewable energy in its member firms.